How Far Will GM Go in Race to Top Tesla?


General Motors (NYSE:GM) might not want to beat Tesla (NASDAQ:TSLA) outright, but the Detroit Three powerhouse is joining the electric vehicle maker in the race to produce an affordable, long-range electric vehicle. GM announced that it is nearly tripling the size of its battery lab in Michigan while the intensity of its focus on EV production increases. The goal is an affordable electric vehicle capable of covering 200 miles on a single charge.

GM’s Global Battery Systems lab has gotten an additional 50,000 square feet — approximately triple its original size — in which engineers will continue development of battery range and cost efficiency. The labs located in Warren, Michigan, are the site of research and testing for the Chevy Volt and Spark, as well as the Cadillac ELR. According to Doug Parks, the VP of GM’s global products program, it’s about stepping up GM’s electric vehicle profile.

“In the past four years, the competitive landscape in the electrification space has grown exponentially. This has required us to raise our game and draw a new line in the sand,” Parks said in a company statement. In that time, Tesla has come roaring out of the West with an electric car that has set the entire industry on edge. While the Tesla flagship Model S wows consumers in the luxury price range, the real race is to the first affordable long-range electric vehicle.

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Tesla’s top-performance Model S can take drivers nearly 300 miles in range. Compared to the hybrid Chevy Volt (approximately 38 miles) and the all-electric Chevy Spark (approximately 82 miles), the electric-only range of GM vehicles is far behind the curve of the California-based Tesla. Parks told The New York Times the goal was to push GM’s EV range to 200 miles while keeping the price near $30,000.

The price of GM’s electric vehicles is not attracting the level of attention one would expect. At $71,070, a Tesla Model S is more than double the price of a Chevy Volt (these prices do not include the federal tax credit). Since average trips for motorists rarely top the mark of 50 miles, early efforts by GM were set with lower range targets in mind.

Tesla has changed all that. The Model S delivered such a complete package — from styling and connectivity to world-class performance and range — that car consumers of the world now consider Tesla at least part of the future of driving. GM is hearing that message loud and clear. In July, news emerged that GM had assembled a task force for studying Tesla vehicles.

That group of GM engineers wanted to see what made Tesla such a success among car consumers. While it’s important to remember the popularity of the Tesla concept and its surging stock prices do not match actual sales and profits, the introduction of a long-range electric vehicle near the $35,000 price point could change the industry for good.

GM seems bent on becoming the first automaker to that goal. The introduction of a third-generation Tesla with the range of a Model S at half the price would do a great deal of damage to every automaker on the planet. It will take at least until 2015, if not 2016, for Tesla to bring such a model to the market. GM is doing all it can to beat Tesla to that game-changing punch.

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